PeggyAnn’s Blog

The weather; it is not possible to predict and “assume” what the weather is going to be everywhere in the US in one news report. It just isn’t. In my particular neck of the woods, the weather differs depending on which neighborhood you live in — that is reality.

So the next time the national news comes on the radio, TV or Internet, or in the newspaper, and they are making statements as to what the real estate market is like. Stop listening. Call your local Realtor, the local expert on real estate,  and speak with them about the market in your home town, in your neighborhood.

That makes more sense than listening to the folks who continue to labor under the false impression that all real estate is national. We know the truth - all real estate is local. Thank goodness!

It is said that today our young adults are suffering from financial illiteracy. True. Almost from the moment they are born, they start to receive credit card offers and by the time they head off to college they probably have a credit card, only maybe a checking account, probably some type of debit account but they have no idea how to manage money! 

Ridiculous? Yes; but that is the reality of our society today. So what can we do…we, and you especially as a parent, can start today helping to teach through examples. One great example is including your teenagers when you embark on the process to buy or sell a home.

Think about it; buying a home requires obtaining some knowledge of current loan products and which ones fit your financial needs, getting in touch with the current conditions of the market, evaluating and  comparing properties, and finally offering, negotiating, and then closing on your new home.

Including your children in the selling process provides similar practical financial principles also with negotiating techniques.

I believe it is time for us to help our young adults get ready to face the world and to understand how money works and more importantly how money can work for them. The side benefit of this practical teaching method, is that including your kids in your real estate transactions will also help to show them the importance of home ownership.

OK. It is August of 2007. The mortgage landscape is a little different today, than it was last year. So…how do you find the right mortgage for you now?

It will take a bit of time and some effort; but it will be worth it in the end.

1. First, put together a realistic budget. Both yearly and monthly. What are the expenses you have today? For utilities, car payments, student loans, credit cards, savings etc? Put down everything that you spend or are anticipating to spend each month and throughout the coming year.
2. How much cash do you have readily available for a down payment and for closing costs? How much extra cash might you have for moving expenses, for the expenses that a new home or property may cost you (interior painting, new drapes, carpet cleaning, new appliances etc)
3. What are you currently paying for a monthly house payment or rental payment? Is it comfortable? What can you realistically budget for a house payment and still be able to pay your other bills, including the different house costs that you will have for your new property (utility costs etc)
4. OK. Now you are ready to start shopping. Working with a Realtor that you trust, obtain a generic mortgage application and fill it out in preparation for your visits; make a copy for each lender. Visit no less than three companies which offer mortgages in your area. make sure that if you visit an Internet lender, that you also visit at least 2 “brick and motor” lenders in your area!
5. Ask questions and get whatever they tell you in writing! a) what types of loans are available for you? b) considering your monthly income and monthly debts, what is the anticipated monthly payment that you can afford per your criteria under the various loan types for which you are qualified? What does your monthly payment include (principle, interest, taxes and mortgage insurance)? c) how long does the entire process take from application through closing? d) do these loans have an adjustable rate or a fixed rate? If adjustable, how much can they adjust over what period of time? Can the adjustable rate be changed to a fixed rate; if so when and how and what will it cost? Obtain a “Good Faith Estimate” on each of the loans for which they say you are qualified!
6. Go back home and look over the information that you have been given. Look at the monthly payments, the cash required for down payments, and closing costs and compare that to the budget you put together earlier.
7. Work with your Realtor to make sure that you understand the current market conditions and who is typically paying for which closing costs; as well as the entire process from viewing properties to making an offer to and through closing.

I hope with this information, the work you put into the process of finding the right mortgage loan for you will help to make the home buying process smoother, and more gratifying.

If you want to purchase a new home or property, how do you find the right REALTOR?

First, it is not about who has the most ads in the newspaper, or whose picture you like the best, or the agent who happens to live near you.

And, it is not about trying to “do it yourself” and thinking that you are somehow going to save money — buying without the expertise of a competent REALTOR can cost you time, money, and often heartache.

It is about who is the most professional, ethical REALTOR and who can and will provide you with the best service, the best value for your money.

So…how do you find the REALTOR of your dreams? This way….

• Start with asking your friends and neighbors; who have they used that they liked? Who does your loan officer or mortgage consultant or title company believe does the best job? (If either says that you don’t need a REALTOR, thank them and move on.)
• Who did you use the last time and did they do a good job?
• Next; it is time to interview some potential candidates. Call at least 3 of the REALTORS you have found so far and ask to have an appointment.
  • How do they work; for you? for the seller? It is vital that you find someone who will represent you and look out for your best interests.
  • Do they ask you what you want and need in your next home or property? Specific questions and do they show interest in what you say?
  • Do they listen to your concerns and do they want to know and understand your goals?
  • Do they ask how often you want to be contacted and how that contact should be made: i.e. phone, e-mail, etc
  • What do they recommend in regards to your finding out what you are qualified for; i.e. type of loan and any restrictions?
  • Do they explain to you what the market for buyers is today? Do they explain what costs you may or may not have to pay in this market?
  • Do they help you to understand the basics of how offers are made and what conditions are usually asked for by buyers in their earnest money agreements in today’s market? For example do they explain that getting a property inspected by an expert is in your best interest? Do they let you know what disclosures the seller is required to make by law?
  • What type of marketing do they do; from company websites, to agent websites, to Blogs, to newsletters, to newspaper ads.

Consider carefully the answers to these questions and you are bound to make the right decision when choosing a REALTOR to help you find the right home or property.

It can happen. You were so excited about buying that home, even though the price and the mortgage was a little out of your price range. But you went ahead and purchased it anyway. Now you find that the your mortgage payment is putting too much of a squeeze on an already tight budget. What do you do?

Here is some advice.

1. Start some serious budgeting…RIGHT NOW. Look at what you spend and where it goes on a monthly basis; everything from the monthly payment to heat and lights, to other utilities and taxes, groceries, education, car payments, incidentals, discretionary purchases etc. What are your balances on your credit cards? Cut back or reduce expenses now. Get rid of credit cards! Banks, mortgage companies, credit card companies not only look at if payments are made on time (on the due date, not within the month they are due); they also note every single time a payment is late (not paid on the date due).

2. Find a bank or mortgage company to refinance your mortgage NOW, with a more traditional principal and interest payment, with hopefully a fixed interest rate with the closing costs rolled into the loan. It is possible if you have high balances on your credit cards that the bank/mortgage company will want to pay off those balances or at least somehow consolidate them. Fine – credit cards are too easy of a way to get yourself extended – fewer cards are better.
3. If you cannot dramatically adjust your budget and/or cannot refinance with a mortgage payment that you can live with within your new budget, then you should sell your home and move into another home where you are going to have to rent until you repair your credit rating and obtain enough money for a reasonable down payment for the next time you buy.. At this point the current and future financial health of the family might only be saved if you get yourselves out from under this loan.
4. Can’t sell? Consider renting the property even if it costs you a little money. Keeping the home while you move into a smaller lower cost house, may allow you to keep the home and avoid foreclosure.
5. From now on: live within your budget, buy things that you can afford, pay bills on the date due. Pay by cash, not credit cards. Put aside at least 10% of your gross income every month into a savings account that you do not touch! It is time to get a grip on your financial situation and do what needs to be done to help your finances into good health.

Here is a website you can go to for more information!

http://www.realtor.org/government_affairs/housing_opportunity/resource_center/mortgages.html

So…..quick what do we do now? Answer - do not panic!

Take a deep breath, put your emotions aside (I know that is difficult) and sit down with your REALTOR to analyze the offer.

Here are a list of questions to get you started:

• Who is the agent or licensee that is working with the buyer? Who do they work for?
• How long do you have to consider the offer?
• How much earnest money has been deposited with the offer?
• How does the offer compare to the price you set for your home?
• Is the offer for cash or dependant upon whether or not the buyers can qualify for a loan?
• When is it anticipated to close? And, when do the buyers want possession?
• What closing costs or concessions are you being asked to pay?
• What are the contingencies (meaning, what must be done, or what investigations must be completed, for the buyers to buy the property?) Typically these can cover the appraisal, inspection of the property etc.
• What is the market like today, and what is the market going to be like between now and when you absolutely must sell?

Working through the answers to these questions will get you on your way to understanding whether or not you want to accept or counter the offer presented (which means you are rejecting the offer that has been presented and saying that this is what you will accept).

It is almost always never a good idea to flat out reject an offer. If someone was willing to take the time to have an offer written and to place with the offer earnest money, it is worth your time and your effort to at least tell them what you will accept (counter an offer).

Work with your REALTOR to decide your best strategy based on the parameters of your market today. Together you will get the price and the terms that satisfy the goals of both you and the buyer.

If you have followed the advice on the previous post, I know you are serious and ready to put your home on the market and get it sold! Here are your next steps to success!

• Of course pricing. Make sure that you have asked your REALTOR to prepare an analysis on what price range you should price your property based upon what has sold within the previous 3 to 6 months (timing will be dependant on which market you are in) in a similar location and with similar amenities, as well as what the competition is in that price range for your home right now. Don’t worry about what you might have gotten for your property a couple of years ago. The reality is…now is when you are selling. You have to deal with the realities of the market today (not yesterday).
  • It is also important to find out what the timing is typically for  a sale, what closing costs the seller is typically paying in the market today and what else you might need to do to prepare your home for showings.
• Now that your home is priced, let’s talk about marketing. Depending on where you are located in the country there will be a variety of marketing efforts that will be needed to let the buyers in your market now, and ones that come in the market later, know that your home is for sale!
  • The Multiple Listing Service - this is where information on your home is shared with other agents within the area so that they can tell the buyers they are working with that your home is for sale. Very important! Make sure your agent knows that you want your home within the MLS!
    • Lockboxes - speak with your REALTOR about this special key box access to your home
    • Signage - help the REALTOR understand where you consider the best place or places for a sign which tells  everyone that your home is for sale.
  • Internet Advertising: whether this is on the agent’s website, or the brokerage’s website, or realtor.com all are important to make sure the information is available to get your home sold. Give your REALTOR all the marketing information they need to make your home on these websites pop; i.e. great pictures  if you have them (and/or the REALTOR will take pictures and maybe a video), floor plans, etc.
  • Print, radio etc as applicable to your location
  • Marketing pieces to be placed inside your home for when the home is shown
• Showing your home: make sure that you and your REALTOR work together to decide how and when your home will be shown. Typically the easier it is to show your home, the more likely it will be shown. And…remember that it is not a help to have you or members of the family in the home when it is being shown (or your dogs). It is vital that buyers who are seeing the home with their (not your) REALTOR are able to ask questions and receive information that helps them decide whether or not your home is a possibility for them.

 That is it for this segment. Next…oh my word we have an offer!

Whether you are an owner, or a REALTOR, it is important to sit back and take a good look at the home you are about to put up for sale…as if you were a buyer looking for their next home. Easy, you might think! In reality it is very difficult. Why? We love our homes!

Here are my steps for preparing your home to sell!

1. Start by walking around the outside of your home, then walk through every room, including your garage. Take a clip board with a pad of paper. Look at every corner up and down and write what needs to be repaired, replaced, picked up or put away. When it comes to “stuff” our mantra must be…less is more! Next: put together a time line and cost schedule to take care of what you have written down. Most repairs/maintenance etc should be taken care of prior to putting the home on the market
2. Gather all your warranties for your appliances, garage door openers etc and place in an envelope that can be easily found. Also get copies of heating/colling costs for one year, major repairs that have been completed within the last 5 years, and major repairs that are anticipated within the next 3 years and put them in another file giving a copy to your REALTOR.
3. Take the time to visit a couple of homes in your area that are holding an “open house.” Note what they have done both good and bad to get their home ready to show. Write down your impressions. Bring the good ideas back to your home!
4. Clean up! Start with the windows inside and out! Clean out drawers and closets removing to a storage unit if necessary extra “stuff” so that interested buyers can really see what room your home has to offer! Clean all appliances thoroughly, including the inside of your refrigerator, oven, and stove top; clean bathrooms until they twinkle especially around the tubs, showers and toilets.  Fresh flowers are a nice addition to your home. Clean window treatments if necessary. Everything should smell fresh and clean and not masked! Take down those posters from the bedrooms that our kids love! Store them carefully for the next home, but take them down for the sale period. Make sure that light fixtures inside and out have the maximum wattage light bulbs allowed by the manufacturer –no more mood lighting for a while!
5. Consider whether or not you need to repaint the interior or exterior, and either professionally clean the carpets, or possibly replace them if they are too old (your REALTOR can help you make this decision). A fresh coat the paint dramatically improves the look of your home.
6. Remove extra counter top appliances! Let the buyers see your counterspace and your storage space!
7. Remove extra furniture from throughout the home. Make sure that you can easily walk around and through the entire home! Make sure that the furniture is arranged so that you can easily flow from one room to the other
8. Remove those knickknacks that we all collect and like to display. They tend to be a distraction, and frankly they can be a target for sticky fingers.
9. Garage – it used to be that people expected the garage to look like a mess because that is what they are for! Not so any more. The garage too needs to be cleaned up and organized with all that extra stuff we tend to store there, moved until we have sold the house.
10. Pets: first ,make sure you are cleaning up after them and then (take a deep breath) not every one is a dog or cat person. Sad, but true. So make sure that dogs will be removed anytime the property is shown, and that cats are contained during the showing process. Other pets…the keys are there must be no smell and they must be contained!

OK! That is the start…next installment….. So…I have done all of this what do I do next?

Welcome to PeggyAnn’s Blog! This blog will provide you with valuable information, tips, and general insights to help you successfully buy and sell real estate!